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Tax Burdensome

Proposed "fair and balanced" city tax plan rests squarely on workers' backs.

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If you work in the City of Pittsburgh, the financial overseers want you not only to bail out the near-bankrupt government, but to give the business community a tax break, too.

 

 

The save-the-city plan recommended by the fiscal oversight board would have nearly everyone who works within city limits paying $144 a year for that privilege. That's up from the current $10 occupational privilege tax, and would add $32.7 million to the city's coffers. Those earning less than $12,000 a year would be exempt from the tax.

 

Meanwhile, other taxes would be rearranged so businesses would pay $7.75 million less than they currently do. In other words, nearly a quarter of the tax hike on workers would cover tax cuts for businesses.

 

At a news conference following the oversight board's Nov. 12 meeting, board member Jim Roddey tried to fend off the characterization that the plan included a business tax cut. "The small and mid-sized businesses will actually pay less, but all of the larger companies will pay more," said Roddey. "This is going to affect PNC [Financial], Mellon [Financial], Federated [Investors]," he noted. All three companies, and many more in the financial and manufacturing sectors, are exempt from current business taxes, but would pay the new levies. Roddey added that such companies could just leave the city if their new taxes were set too high.

 

"What we are recommending is fair and reasonable and balanced," said board member John Murray.

 

The proposal now goes to the General Assembly, where some legislators have argued that a $144 occupational privilege tax is too high. Should the legislature fail to act, the city can ask the courts for the power to slap an income tax on commuters.

 

The Nov. 12 meeting included no real debate, with each oversight board member speaking in favor of the plan, followed by a unanimous vote for the package. Still, there was one order of business that hadn't been decided in advance: After the meeting, board members discussed which room at the Duquesne Club they should retire to for lunch.

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